A newly launched government consultation gives concerned parties the chance to express their opinions on the Direct Recovery of Debts by HM Revenue & Customs, a measure announced in the 2014 Budget speech.
Under the planned legislation, HMRC will be able to simply take funds from a taxpayer’s bank account, if they owe more than £1,000 on tax or tax credit debts.
This will only be done after multiple attempts to contact the debtor, and will never leave anybody with less than £5,000 across all of their accounts.
But it has raised concerns from several groups, as outlined in the Treasury Committee’s reaction to the Budget.
The Institute of Chartered Accountants in England and Wales called the measures “extremely worrying and excessive”, adding that there is an essential need for safeguards to be introduced.
The Chartered Institute of Taxation said the power granted to HMRC by this move is unprecedented, and again expressed concern at the lack of a mention of any safeguards for people on low incomes.
And in instances of insolvency or liquidation, the ICAEW warned that HMRC could essentially be seen as a preferred creditor – something supposedly abolished with the end of Crown preference in 2002.
The consultation launched on May 6th 2014 and is being run by HMRC, and is welcoming submissions particularly from banks and building societies, and groups who represent low-income individuals and vulnerable debtors.
Anyone keen to make their views known should contact HMRC directly, and the deadline to do so expires at the end of July 28th 2014.